Yearly home-price growth continued to slow in September, with the year-over-year price gain shrinking for the sixth consecutive month, according to the S&P CoreLogic Case-Shiller National Home Price Index, released Tuesday.
Nationwide home prices posted an annual gain of 10.6% in September, bringing the index to a reading of 300.41. In August, the index recorded a year-over-year increase of 13.0%.
“As has been the case for the past several months, our September 2022 report reflects short-term declines and medium-term deceleration in housing prices across the U.S.,” Craig Lazzara, the managing director at S&P DJI, said in a statement.
Month over month, the US National Index posted a seasonally adjusted decrease of 1.0% in home prices.
“On a monthly level, home prices continued to drop. While buyers are stepping aside waiting for more affordable prices and rates – causing the slowdown on price growth – would-be sellers are sticking their ground and holding tight to the inventory they currently own,” Nicole Bachaud, Zillow’s senior economist, said in a statement. “As a result, prices might not continue to plunge down as much as some projections anticipate— as the available inventory of homes on the market is constrained.”
The Case-Shiller 20-city home price index posted a 10.4% annual increase, down from 13.1% in August. This yearly increase brought the 20-city index to a reading of 306.29. All 20 cities analyzed posted lower price increase in the year ending September 2022 as compared to the year ending August 2022.
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(The Case-Shiller home price indices for September is a three-month average of closing prices in July, August and September. Because most home sales take several months from contract to closing, the data likely includes some deals struck in April and May.)
Home price growth in the 10-city composite index also slowed in September, reporting a yearly gain of 9.7% to a reading of 317.35. A month prior, the 10-city index posted a year-over-year increase of 12.1%.
Yet again, Miami, Tampa and Charlotte had the highest annual gains among the 20 cities, with year-over-year increases of 24.6%, 23.8%, and 17.8%, respectively.
“Despite considerable regional differences, all 20 cities in our September report reflect these trends of short-term decline and medium-term deceleration. Prices declined in every city in September, with a median change of -1.2%. Year-over-year price gains in all 20 cities were lower in September than they had been in August,” Lazzara. “The three best-performing cities in August repeated their performance in September. The Southeast (+20.8%) and South (+19.9%) were the strongest regions by far, with gains more than double those of the Northeast, Midwest, and West; the two worst performing cities were San Francisco (+2.3%) and Seattle (+6.2%).”
With the Federal Reserve expected to increase interest rates potentially three more times in the coming months, Lazzara said he expects the decline in home price growth to continue.
“As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive and housing becomes less affordable,” Lazzara said. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to decelerate.”
